Small and Medium-sized Housebuilders

Baroness Thornhill Excerpts

Wednesday 12th July 2023 Lords Chamber

Asked by

[Baroness Thornhill]

To ask His Majesty’s Government, further to the letter to the Prime Minister from housebuilding firms on 6 July, what steps they are taking to strengthen the viability of small and medium-sized housebuilders.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

SMEs are an indispensable part of our housebuilding sector, and we are committed to strengthening their viability. We are providing financial support through our £1.5 billion levelling-up home building fund, which will help SMEs build around 42,000 homes. Through the £1 billion ENABLE Build guarantee scheme and the Levelling-up and Regeneration Bill changes to the planning system, we will further support SMEs in making the planning process easier to navigate, faster and more predictable.

[Baroness Thornhill (LD)]

I thank the Minister for her genuinely helpful Answer. With planning permissions at an all-time low and taking longer, the Home Builders Federation says that SME builders are going out of business now, while 145,000 desperately needed homes are on hold due to, to quote its letter to the Prime Minister, the Government’s “anti-development policies”. Does the Minister agree that this is largely a result of policy conflicts and mixed messages from the Government, as reported even today in the Times? It might be helpful to SMEs if they knew what the Government were doing about the 48 local authorities that have paused or withdrawn their local plans and the 74 that are affected by Natural England’s nutrient neutrality building moratorium. SMEs in these areas need urgent action; they cannot just pack up and go elsewhere.

[Baroness Scott of Bybrook (Con)]

I have explained how we are supporting them financially, but we are aware that the planning system, for example, is not as user-friendly as it should be to SME builders. That is why we are making changes in the LUR Bill, but we are also trying to ensure that the planning system is now better funded, so any time now we will see an increase in planning fees, for example, by 35% for major applications and 25% for other applications. All this investment should make sure that SMEs find the system simpler and easier to use, and that therefore they can access it and build more houses for us.

Homelessness: Vagrancy Act 1824

Baroness Thornhill Excerpts

Monday 10th July 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, I never said that I would bring it forward—I said that the Government would. It is now in the hands of the Home Office, which is dealing with this.

[Baroness Thornhill (LD)]

My Lords, rough sleepers are just the thin end of the wedge, as the noble Baroness knows. Part of the long-term solution to homelessness must be to build many more homes for social rent and, in particular, to increase the public sector’s role in building them. Given the additional financial pressures there are on social housing providers, as we both know—not least the decent homes standard, net-zero homes, fire safety and increased construction costs—will the Government commit to a minimum 10-year rent deal for these landlords to allow a longer period of annual rent increases and long-term certainty so that they can plan to build more much-needed social homes?

[Baroness Scott of Bybrook (Con)]

The noble Baroness is absolutely right that we need more homes in this country—more affordable homes and more homes for social rent. That is why we are putting £11.5 billion into the affordable homes programme and, importantly, working with local authorities to ensure that they look at every possible way of using the £500 million we are giving them to keep people in their homes in the first place, rather than becoming homeless.

Homelessness: Homewards Initiative

Baroness Thornhill Excerpts

Tuesday 4th July 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

We are responding by offering support through initiatives such as spending £500 million on rough sleeping initiatives between now and 2025. Under the ending rough sleeping for good initiatives, £2 billion is going to local authorities over three years to look at their issues. Your Lordships need to understand that the increasing numbers are only in 5% of local authorities in this country. We need to target and help those local authorities, both with support and with money, which is what we are doing.

[Baroness Thornhill (LD)]

My Lords, last year, 129,000 young people facing homelessness, aged between 16 and 24, tipped up at their local council asking for support—which is undoubtedly an underestimate. Currently, universal credit levels for young people living independently are more than a quarter lower than for those aged over 25. Can the Minister say by what logic we financially penalise young people, whose bills, including rent and essentials, cost exactly the same regardless of their age, and does she agree that this shortfall will make them even more susceptible to eviction and homelessness?

[Baroness Scott of Bybrook (Con)]

The noble Baroness is right, which is why, in the Government’s strategy Ending Rough Sleeping for Good, which was backed by £2 billion last year, we recognise the particular challenges facing young people with regard to homelessness. We have a single homelessness accommodation programme, which will have delivered nearly 2,500 homes by March 2025. There is also the £2.4 million for rough sleeping initiatives going towards youth services in local areas that have an issue with youth homelessness.

Non-Domestic Rating Bill

Baroness Thornhill Excerpts

2nd reading
Monday 19th June 2023 Lords Chamber

[Baroness Thornhill (LD)]

My Lords, I regret that I was unable to attend the Minister’s meeting last week due to a prior medical appointment. She has partly answered some of my concerns, and I will read her contribution in Hansard to check my understanding.

Business rates are an excellent source of funding for the Treasury. They are easy to collect and reasonably difficult to avoid, and they contribute 5% of the country’s tax receipts. While mayor, I was frequently lobbied by local businesses for which the first eye-opening piece of information was that the council did not get to keep all our business rates—far from it. There was a time when I would say, “We collect £60 million but get back only £6 million”. That will have changed now with 50% retention, but the sector continues to lobby for 100% retention while understanding and acknowledging the need for equalisation.

An issue of wider concern for me is that there remain no incentives for local authorities to really invest in business and economic growth under the current system, yet the economic health of a council area, regardless of whether it is rural or urban, is the critical factor in its prosperity and all that flows from living in a prosperous place. The converse is also true—the poorest regions have the worst outcomes of whatever you care to measure—but that is a debate for another day.

It has to be said that these have been a tough few years for businesses. The pandemic has faded in the memory but not in its impact. Many businesses have failed, and many are still attempting to get back to pre-pandemic levels. Then there has been Brexit. Both in itself and in the Government’s mishandling of, it is yet another hurdle or barrier, as are rising energy costs, the highest inflation for a generation and the unbelievable mini-Budget mess back in October, the impact of which was far from mini.

It is against that backdrop that we get this Bill, so I hope the Minister will forgive us if we are not dancing in the high street saying that it is going to be a game-changer. To be fair, though, the measures in the Bill have to be set against other measures, such as those in the levelling-up Bill and the impact of the business rates retention pilots that are currently taking place.

It is also true to say that businesses on the whole have welcomed the Bill, but they lament that it is a far cry from full business-rate reform. If there is one part of the system that is hit hardest, it is retail, because it is a tax on existence, not profit. Shops are property-based, reliant on having a physical presence in the most profitable and therefore most expensive locations. Internet-based businesses or those which have more warehousing in out-of-town centres are not penalised to the same extent. These discrepancies are not addressed by the Bill. I note the Minister’s remarks regarding recent revaluations and I think we should perhaps look specifically at the reduction in high street properties to see what kinds of shops have been affected.

As the noble and learned Lord, Lord Etherton, has said, the situation is serious. The Centre for Retail Research found that 17,000 shops closed last year—that is 47 shops a day, the highest annual total in five years. More than 5% of retail staff lost their jobs last year, and hospitality suffered a similar fate. Not all these failures are because of business rates, of course, but I am sure they are a contributing factor.

Anyone working with their chambers of commerce will know that the number one concern of businesses—and we should not forget that these are often the small and medium-sized businesses in an area—is always business rates. Business rates are a fixed cost that business cannot escape. Businesses have to pay this tax before they have turned a penny in profit. The reality for our high streets specifically is that high rates discourage casual lettings of vacant properties, and in general they disincentivise improvement or expansion, let alone innovation.

So we believe the Bill is not going to solve issues in our high streets. Regrettably, it appears to increase bureaucracy rather than cutting red tape. Many businesses will now have to send in their annual notification, with significant penalties in place if they get it wrong. The noble and learned Lord, Lord Etherton, said that 700,000 businesses could be affected, and I would welcome some clarification on that. Ultimately the Bill will not reduce the burden of tax on business, which, as several noble Lords have said, is too high.

My general overarching concern, and my question to the Minister, is: what assessment have the Government made of the capability of both local government and the VOA to deal with the changes in the Bill, knowing as we do of the resource cuts and staff shortages over recent years? Have the Government taken into account the current backlog in dealing with appeals, and other causes of delay, within the VOA?

From the speeches of other noble Lords and the excellent briefings that we have received, we can see that the concerns of business focus on several clear-cut aspects. The Bill proposes a move to three-year valuations. It was clear that we needed to move to more frequent valuations, but the feeling is that three years is not enough to keep up with the sudden changes that business can experience in difficult times. Perhaps annually might be too tight and onerous, but why not two—or is this the Government’s realistic response to the recognition that the VOA would not cope with annual valuations?

The Bill includes a duty to notify; it requires ratepayers to notify the agency of changes made within 60 days or face what seem to be punitive fines. I would be interested to hear the rationale for why a corresponding duty to respond is not made on the VOA. The Government could impose a reciprocal duty to respond and the ratepayer might get a rebate if that was the case.

It is also noted that the Conservative Party’s manifesto for 2019 contained a promise to

“cut the burden of tax on business by reducing business rates”

yet the uniform business rate multiplier has risen from 34p to 51p. Now, I struggle with the technicality of business rates, which might be apparent, but can the Minister explain how linking the uniform business rate to the consumer prices index will reduce the burden on business? Is the aim of government to reduce the UBR progressively over time or not?

There are valid fears about the levels of new fines that will be brought to bear through small businesses not knowing when, or about what, to update the valuation office. Please can the Minister assure us that the relevant associations have been consulted, to bring greater clarity to this new requirement, as it is surely not the Government’s intention to make matters worse for small businesses? These significant aspects and the other specific technical matters mentioned will certainly ensure there is work to do in Committee; around that, there seems to be a consensus.

Families with Children: Accommodation

Baroness Thornhill Excerpts

Monday 19th June 2023 Lords Chamber

Asked by

[Baroness Thornhill]

To ask His Majesty’s Government whether they intend to take steps in response to the official statistics published by the Department for Levelling Up, Housing and Communities on 10 May which found that 1,630 families with children were housed in bed-and-breakfast accommodation by English councils for more than the six-week legal limit between October and December 2022.

[Baroness Thornhill (LD)]

My Lords, I beg leave to ask the Question standing my name on the Order Paper, and I declare my interest as a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, temporary accommodation is a vital way to ensure that no family in this country is without a roof over its head until it is offered suitable long-term accommodation. Legislation is clear that long-term use of bed-and-breakfast accommodation is inappropriate for families. We are helping councils to prevent homelessness in the first place by investing £1 billion in the homelessness prevention grant over the next three years.

[Baroness Thornhill (LD)]

I thank the Minister for her Answer, and I know that she understands the challenges and pressures that councils face. The root cause of the logjam in temporary housing is the significant lack of affordable move-on accommodation—with the emphasis on “affordable”. Does she agree that, despite the lifting of the housing revenue account borrowing cap, councils and housing associations still face significant barriers to building their own, much-needed social homes? What plans do the Government have to eliminate those barriers, including a more flexible, sustainable approach to both rent levels and borrowing costs but in particular a full reform of the right-to-buy scheme, which disincentivises building when homes can be sold off in two to three years, sometimes at less than it cost to build them?

[Baroness Scott of Bybrook (Con)]

The noble Baroness is absolutely right that part of the issue is the heating of the system and the lack of accommodation available. That is why, since 2010, more than 2.2 million additional homes have been delivered in this country, including 632,000 affordable homes. We have also announced £10 billion of investment in housing supply since the start of this Parliament, together with—I have said this many times at this Dispatch Box—£11.5 billion in the years 2021 to 2026 for the affordable homes programme, which will deliver thousands more affordable homes for rent. I am not saying that this is not a difficult issue to deal with, but the Government have it as a priority and are working through both the affordable housing system and the rented sector.

Housebuilding

Baroness Thornhill Excerpts

Wednesday 7th June 2023 Lords Chamber

[Baroness Thornhill (LD)]

My Lords—

[Baroness Warwick of Undercliffe (Lab)]

My Lords—

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

The noble Baroness has been involved in some of the Committee sessions of the levelling-up Bill, and she will know that we are looking at hope value and land prices. The Government particularly recognise the need for homes for social rent. That is why social rent homes were brought into the scope of the affordable homes programme, for example, in 2018. As I say, the levelling-up White Paper committed to looking at ways to increase the supply of social rented homes.

[Baroness Thornhill (LD)]

My Lords, 40 years ago SME builders built 40% of all new homes. Today the figure is around 10%. The Minister might therefore understand my disappointment that the Government have not accepted my amendment to the levelling-up Bill that would assist SMEs to build on small sites. Will she offer assurances today that the new NPPF, which is being revised and will appear soon, I hope, will have something in it to give SMEs hope that they can get back to building at scale?

[Baroness Scott of Bybrook (Con)]

I am not going to get into what will and will not be in the NPPF at this time. What I can say about government support for SMEs is what we are doing at the moment. We have launched the Levelling Up Home Building Fund, which is providing £1.5 billion in development finance to SMEs and MMC builders and supporting them to deliver more homes. As the noble Baroness said, the Levelling-up and Regeneration Bill will make changes to the planning system that will support SMEs by making the planning process faster and far more predictable.

Levelling-up and Regeneration Bill

Baroness Thornhill Excerpts

Committee stage
Monday 22nd May 2023 Lords Chamber

[Lord Etherton (CB)]

My Lords, I apologise to the Committee: I should have disclosed before I spoke that I have an interest as the owner of high street retail premises.

[Baroness Thornhill (LD)]

My Lords, there is so much that can be said regarding high streets that is very well evidenced, and in fact there is consensus about what does and does not work. Our concern on these Benches is that the various measures in the Bill, even when combined—it is important to see that—probably do not go far enough or are bold enough to really level up or regenerate. However, this is not Second Reading. I am pleased to speak positively to this part of the Bill and to this group of improving and strengthening amendments, which have been well described in appropriate detail by their proposers, particularly the noble Baroness, Lady Hayman of Ullock, as has already been mentioned.

I have to confess to becoming mildly excited about the prospect of local government being able to oblige landlords to rent out persistently vacant high street premises through the rental auctions process. As the elected Mayor of Watford, I inherited a high street shamefully branded in a tabloid headline as “Ibiza on acid”, and where the national crime survey showed one of our town centre side streets as one of the worst crime hotspots in the country several years running. Yes, more bad headlines, but more importantly it was backed up by local people’s opinions, experiences and—never to be forgotten—their perceptions. There was much work to be done, and it took years.

Thus I have bitter experiences of first, and most importantly, trying to track down the landlords of vacant premises—in other words, those who have real legal responsibilities and can actually do something and not just pass the buck. It was rarely straightforward, and any improvement that the Government can make to ease that part of the process would be very welcome and undoubtedly strengthen this policy.

For us, the formation of a business improvement district was critical to eventual success, and one hopes that they continue to be supported. In fact, it was the BID team which was able to do much of the footwork that is going to be needed of continuously monitoring vacant units and all the other premises on the high street. Given the skills and capacity issues in local councils that have been mentioned, this is definitely going to further stretch resources, particularly in district councils. Will the Minister reassure us that the Government have plans to target these issues?

On further investigation, we found that there was often a wide range of reasons why properties were empty, many of them legitimate and often complex and challenging. Amendment 426 in the name of the noble Earl, Lord Lytton, essentially speaks to that dilemma. He may be surprised to learn that I can empathise. I say to him that any good council would and should seek to work with a landlord in the circumstances outlined in his amendment and help and support the landlord in getting the premises re-let. But I recognise that this is not always the case and despair when I hear case studies such as that from the noble Baroness, Lady Fox, of when things have clearly gone awry and councils have not listened. I do not believe in being prescriptive about it because I could stand here and tell noble Lords how pedestrianisation revitalised our high street. My instincts are always to say, “Let councils decide what suits their circumstances”, but in the full knowledge that sometimes they mess it up.

What was key was the partnership approach—agents, landlords, businesses, the council and the community working collaboratively to get things to a point where a compulsory rental auction would not be necessary. That would be a measure of its success. But all too often we found that the landlord was not the kind of one described by the noble Earl but a pension group or similar investor with a wide range of holdings and for which a couple of shops in Watford High Street were small beer. For a wide range of commercial reasons it did not “suit their circumstances at the moment” to re-let. I sincerely hope that these are the landlords that this legislation will drive to the table.

The word “community” in my list of partners is important. Amendments 417 and 437 emphasise the involvement of the community, which is the heart of any place, as we know—the hub for getting together to enjoy a wide range of activities and events. In short, it is hard to imagine that a local plan would be found sound if it did not involve a policy for the high street and significantly involve the local community in its formation. Can the Minister confirm this?

Levelling-up and Regeneration Bill

Baroness Thornhill Excerpts

Wednesday 3rd May 2023 Lords Chamber

I want to mention one other amendment of the many that I would like to support, and that is Amendment 290 tabled by my noble friend Lord Russell of Liverpool. This is one of those bits of infrastructure that are vital to people’s lives and their work-life balance. If we do not get that right—if we just look at the hard infrastructure and do not deal with the social infrastructure—we will in effect blight whole sectors of new communities, that need to bed in, with an existence that does not give them the comfort and the sense of place and fulfilment that they should rightly have in their home. This and of course a number of the other points that have been made are vital. I have to say that I have been sitting on my hands trying not to jump up and down and say “hear, hear” to many of the contributions by other noble Lords.

[Baroness Thornhill (LD)]

My Lords, this has been an incredibly wide-ranging, detailed and at times passionate debate, particularly in the contributions from the noble Lords, Lord Greenhalgh and Lord Russell of Liverpool. We are all under no illusions that this is a radical change in policy, and therefore it deserves the detailed scrutiny that noble Lords are giving it over three groups today.

We are told that

“The aim of the Infrastructure Levy is to create a fairer and simpler system of developer contributions, which will ultimately capture more value for local authorities and local communities”.


Who does not agree with that? Unfortunately, the more I have read and tried to get to grips with it, the more complex it becomes and, particularly following this debate, I believe there are legitimate questions as to whether this proposal will succeed in its aims.

Listening to noble Lords, it seems that the impetus for many of the amendments, such as Amendments 290, 335—to which I have added my name—336 and 348 and the many in the name of the noble Lord, Lord Greenhalgh, reflect the extent to which noble Lords are concerned that the current financial situations of many councils will lead them to spend the infrastructure levy on a wider range of social infrastructure, leaving less for other infrastructure. Conversely, other noble Lords are seeking to see if they can spend it on said items. Amendment 343, in the name of the noble Baroness, Lady Hayman of Ullock, seeks to broaden the scope of what infrastructure means. In Amendments 315 and 316, she probed—via the noble Baroness, Lady Taylor, of course—what should be spent on transport. Transport is surely a no-brainer if we are seeking sustainable development.

However, I am concerned that we are trying to get so much out of the infrastructure levy to make up for the real issue, which is over a decade of underfunding for councils. I say very firmly that we support the need for government to ring-fence money for social housing because we believe that this is a national housing crisis, but we feel very strongly that there should be real autonomy for councils to meet their own identified needs with the rest of the levy. I hope the Minister will be able to clarify not only the apportionment of money, but crucially, the power and autonomy of charging authorities in spending the cash raised. My noble friend Lord Shipley and the noble Baroness, Lady Taylor of Stevenage, made a very clear case about the need for up-front moneys, which I hope the Government will take seriously.

So much of this seems to hinge on the infrastructure development strategy. I say to the Minister that I am sure it would help us all if we had more detail about what is expected to be in it. I would value clarification about who signs it off, where it will sit—presumably in the local plan—and its particular relationship to other local plan policies and the NDMPs.

In two-tier areas, CIL has been really controversial, with county councils being concerned or even angry with the levels of CIL set by their districts. The noble Baroness, Lady Taylor of Stevenage, being both a county councillor and a district leader, will be aware of this tension in Hertfordshire. I am still not sure where the power lies in the final decisions about the priorities within that strategy. I expect it will be in forthcoming guidance, but it will be an area of challenge, from the top combined authorities down to parishes.

Amendment 348, supported by the noble Earl, Lord Lytton, argues for a proportion of the neighbourhood allocation of the levy for parishes. Do we yet know what constitutes a neighbourhood or, perhaps, a parish? It seems to me that districts will be very much piggy in the middle in two-tier areas, with much work to do in collaboration and consultation on an area-wide strategy. They will need capacity and support to do this effectively, which is why the Government’s approach of test and learn seems to be the right one. However, can I make a plea? In asking for councils to volunteer, there is a danger that only positively motivated councils will come forward. Perhaps the department could cast around for a two-tier area that has struggled with CIL to get a more accurate picture.

Leasehold Enfranchisement

Baroness Thornhill Excerpts

Tuesday 2nd May 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I thank my noble friend for that question—or statement, I think. Yes, we have made it very clear all along, in answering every question that I have been asked at this Dispatch Box, that we are going to bring forward further leasehold reform and it will be in this Parliament.

[Baroness Thornhill (LD)]

My Lords, my recent experience of helping leaseholders in a retirement block near me leads me to ask: does the Minister accept that going to the final arbiter of leasehold disputes, which is the First- tier Tribunal, is a long, off-putting, expensive, complex process? Can she reassure us that, when the renters reform Bill finally arrives, it will address this unsatisfactory service which, I can bear testimony to, really is a serious detriment to leaseholders seeking fair treatment?

[Baroness Scott of Bybrook (Con)]

Certainly, we will be looking at the First-tier Tribunal issue, as we will be looking at all issues, when we get to the leaseholders Bill and the private renters reform Bill.

Housing: Overcrowding

Baroness Thornhill Excerpts

Tuesday 25th April 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

This is a subject that my noble friend brings up quite often. As I have said, we will continue to look at every solution to the problem of more houses in this country.

[Baroness Thornhill (LD)]

My Lords, for me, the key issue is the lack of suitable homes for people to upsize to at a rent that they can afford. Will the Government please reconsider unfreezing the local housing allowance to help some families, especially those in the private sector, to upsize and get out of those conditions?

[Baroness Scott of Bybrook (Con)]

We have no plans to do so at the moment but I will keep the noble Baroness and the House aware of any that we might have in the future.